Dell posts profits, warns of uncertainties

Dell Inc. recorded revenue of $14.8 billion and $733 million in net income for its most recent quarter but warned that the results could change and that it expects future operating performance to vary due to ongoing reorganization activities.

Component costs are also weakening at a lower rate, which could "adversely" impact results for the second half of its fiscal year, the company said in a statement.

The Round Rock, Texas, company has said it will restate results for the last four fiscal years because of certain irregularities being investigated by the Securities and Exchange Commission. As a result, its latest quarterly results are not directly comparable to those from the same quarter in 2006, the company said.

Without any changes to the year-ago results, Dell's latest performance would have shown a 46 percent increase in profits and a smaller 5 percent rise in revenue.

In the fiscal 2008 second quarter ended August 2, Dell reported gross margin of 19.9 percent and operating income of $896 million. In the year-ago quarter, Dell reported revenue of $14.1 billion and net income of $502 million. It also posted operating income of $605 million for the period.

Dell had in recent months declined to provide estimates for its future performance and maintained this position in its latest announcement. The company said it expects component costs to decline at a lower rate contributing less to margin improvements.

The company also noted that it would be focusing on lowering operating costs and exploring growth opportunities.

"As the company continues to implement its information program, the priority is to drive profitable growth while reducing operating expenses as a percentage of revenue," Dell said in a statement.

"The company expects to accomplish this by improving front-line productivity, reducing headcount where appropriate and investing in infrastructure and key growth initiatives," it added.